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Re: Twinkies (or Wonderbread) No More: Hostess to Close

Originally Posted by gsdx

Tom Murphy is way behind the times. This news came out months and months ago. We had a lengthy discussion about it here.

From the cited article:

The company had warned employees that it would file a motion in U.S. Bankruptcy Court to unwind its business and sell assets if plant operations didn't return to normal levels by Thursday evening. The privately held company filed for Chapter 11 protection in January, its second trip through bankruptcy court in less than a decade.

The new news is it's closing -- under Chapter 11 Bankruptcy you reorganize but stay in business.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

Originally Posted by loki81

declining sales are probably the root of it, but the Bakers' Union's refusal to renegotiate their contract in the face of changing economic conditions and the subsequent strike crippled their ability to even think about trying to recover.

even the Teamsters' Union had been criticizing the Baker's in this... flat/declining sales + increased wage/benefit costs is not sustainable, especially when the Union turns off the production lines so that the company's income drops to 0.

The reason I'm not buying the union blame thing is: They're owned by a hedge fund. To the hedge fund the brand names are worth more than the company. They will end up making a killing. The only people who will suffer are the employees.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

Originally Posted by jackoroe

The labor unions refused to accept an 8% pay cut and now they've got themselves a 100% pay cut. Congratulations!

Current labor unions are modeled after 19th/early 20th centuries. They need to be reorganized and heavy shake up could help too. I'll bet you the union heads will not be struggling with unemployment checks as they tend to sit on 6 figure salaries and other perks. The current union mantra is that every company and employer is greedy. They feed this to their union members and expect unrealistic demands. They thought some bread company was like Mitt Romney's Bain Capital and they lost. When a new company will buy twinkie out, they won't be hiring back all 18,000 people.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

I remember before the mall was in built in Natick, it was a hostess factory. Now that space is occupied by "Needless Markup". Unions are only a part of the problem but between declining sales and a "bilge and purge" mantra, this was gonna end badly.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

Rochester Hostess status report.....

Wegmans Pittsford, Marketplace and Chili Paul stores...no Twinkies, HoHos, Fruit Pies, or Ding Dongs. They did have Wonder Bread. A friend who works at Wegmans Lyell tells me they still have HoHos and Wonder Bread but nothing else. Wegmans Ridgemont is out of everything.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

"UNIONS ARE BAD!"
"TWINKIES ARE BAD!"

The whole thing is a hell of a lot more complicated than that. Yes, it's unrealistic for a union to go on strike when a company is already in Chapter 11; I imagine that specific baker's union local is poorly led. However, when companies cite rising salaries as a untenable burden when their prices are going up at exactly the same rate, they are lying. What they're worried about is a drop in profits. If the profits aren't passing the increase of cost of living, which is due mostly to inflation, then the folks who own the place aren't actually getting richer, they're just sitting in the status quo.

Many companies are moving to cheaper parts of the country so they can get cheaper labor; even more are just moving out of the country where they can get nearly slave labor. If the cost of shipping the goods from a remote location is less than the savings of moving to that remote location, then why should they do it? Because the unions slow them down, is why. Unions prevent employers from treating employees as disposable assets.

RaKroma's point about unions being mired in the 19th and 20th centuries is a good one: the unions of the Industrial Revolution mostly protected unskilled or low-skilled laborers by wielding the power to shut down production; now that the transport of goods is cheaper than the difference between an urban setting and a rural setting (or a third-world setting, for that matter), low-skilled or unskilled labor really is a disposable asset, a factory can just up and move to Mexico if it wants. Striking is no longer a viable option when the workers are easily replaced.

Industrial baking is not rocket science, anybody with an IQ of 80 can do it; industrial bakers going on strike in a recession are morons.

However, if the shut-down of baking at one facility in one state can take down a national organization, you really cannot blame the bakers. The company had to have been disastrously ill-organized and extremely mismanaged... and my guess is that it was ill-organized and mismanaged in order to reap short-term profits. And yes, the workers will suffer while the owners will sell everything for scrap to large organizations (probably Kraft or Nabisco) and walk off with a pot of money that they can reinvest in something else that's more profitable. But that would have happened whether the bakers struck or not.

Twinkies will continue to be produced, as will Wonder Bread; the people who own Hostess will be just as rich as they've always been. And the bakers at that factory will be replaced by people who are too afraid of unemployment to unionize, and they'll be trod upon like slaves. And then we'll be right back where we were in the 1880s.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

And it looks like I was right... we're learning that the company's owners and executives have been strip-mining Hostess ever since it entered Chapter 11, paying themselves ridiculous salaries and loading up debt. And when they sell off the last little shreds, the name and the recipes, they'll bugger off to the Caymans leaving the workers holding the bag.

Gotta love that unregulated capitalism! But then, I guess I'm just bitter because I don't have a company of my own to rape.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

Originally Posted by loki81

declining sales are probably the root of it, but the Bakers' Union's refusal to renegotiate their contract in the face of changing economic conditions and the subsequent strike crippled their ability to even think about trying to recover.

even the Teamsters' Union had been criticizing the Baker's in this... flat/declining sales + increased wage/benefit costs is not sustainable, especially when the Union turns off the production lines so that the company's income drops to 0.

As usual notice how you leave off this little tidbit regarding the mgnt in the company while blaming the lower rank and file? Everyone should sacrifice but the top tier should get huge mother fucking increases when in bankruptcy restructuring and that's A-ok with you? They have had not one but 2 bankruptcies in a decade.

After the workers agreed to the concessions, three private equity companies, Ripplewood Holdings, Monarch Alternative Investmenes, and Silver Point Capital, took control of the company and pledged to invest in modernizing the facilities that stayed open and re branding the company's signature products, Wonder Bread, Twinkies, Hostess Cupcakes, etc.

Instead, money that was supposed to be reinvested in the company was diverted to pay private equity fees, interest on the debt that the new owners took on to buy Hostess, and executive salaries and bonuses.
Hostess's then-CEO, Brian Driscoll, saw his salary rise to $2.55 million from $750,000--a 300% increase.

"Other executives' salaries were increased by from 35% to 80%," the creditors said.

I don't think these firms ever had any interest in investing in the companies. I think they fully intended to take it through bankruptcy and get repaid through the assets. I have no doubt these firms will come out making far more than they invested. They were bleeding it to scrap it as venture interest do. That was the aim and the workers got wise and stood their ground for better or worse. This wasn't going to stop no matter how they caved in. Their suffering with declining income and benefits would end the same way from the profiteers.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

Unions fucked my dad over BIG. He was a member for many years. He and 5 other guys were expected to go on strike while the other 100 guys would get up and go to work because they had signed a "no strike clause" in their contracts. After a week my dads company told him if he didn't return to work he'd be fired. He had worked there for 20 years and really liked his job. He went to the union meeting and tried to reason with the "brothers" (ass holes). They expected him to stay home on strike pay, which was 150 a week and lose his job. Guys he thought were his friends called him horrible names, threatened me and my three brothers lives, threatened to rape my mother while he was at work, vandalized our home and it went on and on. My dad had a family to provide for and these ass holes expected him to lose his job for 150 a week while they earned 1k a week. My dad was supposed to lose his job so the non striking members could get a raise. My dad went back to work & his employer hired security guards for our home. My brothers and I had security guards with us for over a month. It was horrible. That's a brotherhood. Threats, intimidation, vandalism and violence. All while they go to work and provide for their family. When it was over the idiots signed the exact same fucking contract they had before the "strike". The other 5 guys bowed to the intimidation and lost their jobs. Two of them actually had the guts to come to our house and ask my dad if he'd go to his boss and see if they could get their jobs back. Thankfully my dad told them to go pound sand. My dad stayed with the company until the day he died. His employer treated him very well and still check on my mom and help her out.

I understand there was a day and time where unions were necessary. And I'm not saying ALL unions are bad but they're not totally innocent either. I'll never join a union. No thank you.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

Georgiadude has made some pretty redneck pro-Republican statements before. He goosesteps to the Republican Party flag.

Right now, I hate the Republican Party so much that I can't even think about it without foaming at the mouth, despite the fact that I supported both Nixon and Ronald Reagan myself.

You are clearly delusional. I seldom if ever make any political comments. I use the name Georgiadude because I live in Georgia. So that automatically makes me a republican? Im not going to get into some back and forth with someone the likes of you. You either took too much medication today or forgot to take them all together. Either way, your way off base. I've reported your post and have added you to the ignore list. good riddance.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

Hedge funds and private equity funds acting in a predatory or incompetent manner?
Happens all the time - and it's hard to tell how much debt the company's really in, given the amount claimed by the hedge funds could be way more than the same funds paid for the debts. Lenders have probably done the maths and figured they could sell the assets at fire sale prices for a profit while ditching any pay or pension obligations.

Re: Twinkies (or Wonderbread) No More: Hostess to Close

They're back!!!

Twinkies Will Last Longer Than Before When They Hit Shelves Again

Hostess Brands LLC says the spongy yellow cakes will have a shelf life of 45 days when they start hitting shelves again July 15. That's nearly three weeks longer than the 26 days the previous owner had stated as the shelf life for Twinkies.

It also seems that some stores will receive frozen Twinkies, to which the store can affix its own expiration date.